AUD/USD: Recalls familiar area near 0.7300 after a volatile day


  • AUD/USD keeps the recovery moves from the weekly low of 0.7257 after declining from 0.7312.
  • Post-FOMC US dollar strength crushed strong read of Australia’s August month jobs report just to recall buyers afterward.
  • News that the Fed prepares for second stress test weigh market sentiment off-late.
  • Brexit headlines, vaccine hopes and mixed data triggered the quote’s pullback

Following Thursday’s rollercoaster ride, AUD/USD returns to near 0.7300 known area, currently around 0.7312, at the start of Friday’s Asian session. In doing so, the pair stays mostly unchanged after rising for four consecutive days. The reason could be traced from the recent challenges to the risk-tone sentiment as market recovery from the second half of the previous day fades amid mixed messages.

No cheers for upbeat Aussie data…

Australia’s August month employment numbers surprised global traders with the Unemployment Rate’s four-month low of 6.8%, not to forget upbeat Employment Change figures of +111K versus -50K forecast, early during the previous day. However, the US dollar’s jump to one-week high poured cold water on the face of optimists before wiping it off during the later part of Thursday amid a shift in the market sentiment.

While the US dollar’s previous rise could be traced from the Federal Reserve’s perceived optimism and fears of a temporary brake to the easy money, recovery in the global risks might have taken clues from the news concerning Brexit, coronavirus (COVID-19) and mixed US data.

Recently, the US Federal Reserve said that it prepares for another stress test for large banks and the results will be out in October. The news counters the previous day’s optimism portrayed by the American central bank policymakers. Additionally, news that the group of scientists advising the UK Prime Minister Boris Johnson and his government recommend another two weeks national lockdown also probe market players.

Comments from the EU Commission President Ursula von der Leyen that she believes a trade deal with the UK was still possible despite the “distraction” caused by Boris Johnson’s Internal Market Bill became the key together with the BOE’s readiness for negative rates. Further, US President Donald Trump teased the vaccine to be out by late October while mixed prints of American Jobless Claims and the Philadelphia Fed Manufacturing Survey also played their role earlier.

Against this backdrop, Wall Street closed in red while the US 10-year Treasury yields stay around 0.69% with no major changes by Thursday‘s end.

Looking forward, a lack of major data/events on the calendar may push traders to watch over risk catalysts for fresh impetus. This also gives hope of consolidation in prices after the bulls’ dominance so far during this week.

Technical analysis

Hanging man candlestick on the daily chart suggests buyers are tired following multiple failures to stay strong beyond 0.7300. Though, 21-day SMA near 0.7275 and an ascending trend line from August 12, currently around 0.7220, act as strong downside supports.

Additional important levels

Overview
Today last price 0.7314
Today Daily Change 8 pips
Today Daily Change % 0.11%
Today daily open 0.7306
 
Trends
Daily SMA20 0.7271
Daily SMA50 0.7176
Daily SMA100 0.6957
Daily SMA200 0.6764
 
Levels
Previous Daily High 0.7346
Previous Daily Low 0.7278
Previous Weekly High 0.7325
Previous Weekly Low 0.7192
Previous Monthly High 0.7416
Previous Monthly Low 0.7076
Daily Fibonacci 38.2% 0.732
Daily Fibonacci 61.8% 0.7304
Daily Pivot Point S1 0.7273
Daily Pivot Point S2 0.7241
Daily Pivot Point S3 0.7205
Daily Pivot Point R1 0.7342
Daily Pivot Point R2 0.7378
Daily Pivot Point R3 0.741

 

 

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